Home Video Sales Expected To Go Strong Until 1999

Last year, the average household with a VCR rented 51 tapes, bought four movies or other programming on cassette and spent a total of $182.43 on home video.

The statistics, which are in a survey of the communications industry issued last week by the investment banking firm of Veronis, Suhler and Associates, indicate an upward trend for home video that is expected to continue until the turn of the century. At that time, many analysts expect, electronic delivery will begin to cut significantly into visits to the video store.

In the meantime, the new study finds the country in no hurry to scrap its VCRs. The machines are now in 82 percent of households, with 90 percent penetration predicted for 1999. About the only downward projection is the annual number of cassette rentals per household, which peaked at 57 in 1987 and is expected to drop to 50 in 1999 when VCRs become even less of a novelty to most people.

The average overnight rental fee this year is $2.50, the study says, and for various reasons will rise to $2.80 by 1999. That is still well below pay-per-view movie rates and is the price to beat for any new method of delivery. “Consumers are very sensitive to prices when it comes to in-home entertainment,” the study says.